Russia plays its energy card

Jul 06, 2004 02:00 AM

by Vladimir Radyuhin

Russia has embarked on a new geopolitical game, playing its energy card to reclaim global clout. Its vast energy
reserves and control over the markets in the former Soviet Union are to be leveraged to turn Russia into a
superpower.
As global energy demand soars, the Russian President, Vladimir Putin, wants to position Russia as a key broker in the
international market and use oil and gas exports as instruments to speed up the country's economic revival and
enhance its geopolitical weight. After dropping nearly 50 % from the Soviet era peak, Russia's oil output has soared
again to exceed 450 mm tons (together with gas condensates) by the end of the current year making it the world's
second largest producer, behind only Saudi Arabia.

Total oil reserves are a state secret in Russia, but the former Energy Minister, Yuri Shafranik, estimates that
Russia may have 44 bn tons of oil, more than Saudi Arabia does.
Russia currently exports over 6.5 mm bpd, taking crude oil and product together, and plans to boost exports to about
9 mm bpd by the end of the decade -- roughly equal to Saudi Arabia's current exports.

Russia is also the number one producer of natural gas in the world and has the biggest share -- 32 % -- of global
reserves. Taken together, oil and gas make Russia the biggest energy producer in the world, and moreover, one of the
few countries whose reserves are not shrinking yet.
With the situation in West Asia destabilised in the wake of the Iraq war, the United States and other top
oil-consuming nations have turned their eyes to Russia and energy-rich ex-Soviet republics.